A group of conservative lawmakers and neighborhood groups filed suit on Wednesday to try to overturn New York’s landmark City of Yes zoning reforms, arguing that Mayor Eric Adams’ administration failed to do full environmental reviews and improperly broke the policies into three parts. But several attorneys told Crain’s that the long-expected legal challenge relies on dubious claims.
The lawsuit was filed Tuesday in Staten Island state court by the seven members of the City Council’s conservative Common Sense Caucus, along with state lawmakers and civic groups from mostly low-rise neighborhoods outside Manhattan. Although the suit focuses on the City of Yes for Housing Opportunity plan that the council approved in December, an attorney for the plaintiffs said that they were also seeking to annul the other two City of Yes plans passed starting in 2023 — which loosened zoning rules affecting climate-friendly construction and business growth — since the suit claims the plans were improperly approved separately without considering their collective impact.
“The City of Yes is a disaster and a calamity for our city,” said Paul Graziano, a professional city planner and vocal critic of City of Yes, in a press conference outside City Hall. “It is a destructive force solely for the creation of luxury housing and market-rate housing for developers.”
The suit also asserts that the city violated the State Environmental Quality Review Act and city-level rules in the lengthy impact statement that the city conducted for the housing plan. Although the review by the City Planning Department spanned hundreds of pages and concluded that City of Yes would have “no significant impact” on the environment, the plaintiffs argue that the city underestimated how many housing units will be created by the zoning changes and how population growth would affect sewer systems and “neighborhood character.”
City Hall spokesman Zachary Nosanchuk defended the city’s approach.
“When it comes to housing, there will always be those who say, ‘Not in my backyard,’ but we stand by the city’s thorough and transparent review process and will address any lawsuit when it is received,” he said.
The housing plan, which took effect immediately after the Dec. 5 vote, is expected to create some 82,000 new homes over 15 years by allowing backyard and basement dwellings, bigger apartment buildings in dense areas, and small multifamily buildings near transit and above shops in the outer boroughs. Although opponents have cast the changes as dramatic, many experts consider the policies modest, noting that they are designed to induce gradual growth in neighborhoods that have built little housing in recent years.
Supporters of City of Yes have expected that the policy would be challenged in court, given the vociferous opposition it faced in some neighborhoods. But the lawsuit could shake up the city’s real estate industry as builders are racing to take advantage of the zoning changes — which also allow for more office-to-residential conversions, “infill” projects on residential campuses and homes with shared amenities like kitchens.
Experts skeptical
Three land-use attorneys told Crain’s Wednesday that they see flaws in the complaint. David Rosenberg, counsel at Rosenberg & Estis, said it will be difficult to prove that the city’s environmental study was lacking, “given the voluminous record of the environmental review.”
“Much of their lawsuit relies on the idea that the city used a generic environmental impact study instead of a site-specific one,” Rosenberg said. “They might not like it, but that is what the law provides for, and that’s the standard by which the city will be measured in court.”
Mitch Korbey, a partner at Herrick, Feinstein, said he is “confident the city will prevail.” Korbey dismissed the plaintiffs’ claim that City of Yes was actually a single plan improperly “segmented” into three parts to avoid a more comprehensive study — instead, he said, the “City of Yes” branding was only a political label that the Adams administration used to communicate the plans to the public.
“These are distinct initiatives, each with their own environmental review,” he said. “The city did take a thorough, exhaustive and complete analysis. They’ve done it in the way they do for these types of citywide initiatives.”
Paul Selver, a partner at Kramer Levin, questioned whether the plaintiffs had standing to overturn the entire housing package, since few of them appear to be affected by the zoning changes that involve only high-density neighborhoods. And he noted that lawmakers scaled back aspects of the plan in response to criticism, during the same public review process that the plaintiffs now call inadequate.
But Selver said the lawsuit could disrupt the real estate industry even if it is ultimately dismissed. His firm alone is working on hundreds of residential projects that rely on the City of Yes zoning changes, and legal uncertainty could cause some developers to drop their projects — or spook lenders who are wary of taking risks.
“We have to look at this and try to understand what the implications are for our clients’ willingness to make investments,” he said. “It’s a very, very troubling event.”
The plaintiffs’ decision to file suit on Staten Island, a conservative borough dominated by homeowners, could introduce more uncertainty. State Supreme Court judges are elected and therefore somewhat beholden to political influence, and the suit’s plaintiffs include two of the borough’s City Council representatives as well as Staten Island Borough President Vito Fossella.
The infrastructure concerns raised by the plaintiffs were a factor in last year’s down-to-the-wire negotiations with the City Council. To satisfy their fears, lawmakers ultimately secured a $5 billion commitment from the Adams administration — with help from the state — to repair stormwater systems, add flood mitigation and fix other infrastructure.
Nosanchuk, the City Hall spokesman, noted that council members from around the city supported City of Yes in the 31-20 December vote on the housing plan, and pointed to polls that found widespread support for the policies among city residents.
“The Adams administration’s historic ‘City of Yes for Housing Opportunity’ plan is the most pro-housing zoning proposal in New York City history,” he said. “It is game-changing work that will deliver unprecedented, equitable change to our housing crisis by building more housing in every neighborhood, creating 80,000 new homes over the next 15 years, and investing $5 billion toward critical improvements.”
Several of the people involved in the lawsuit asserted that the city rushed the zoning plan forward at the behest of wealthy developers. But large developers were mostly indifferent to much of City of Yes, as Crain’s has reported; indeed, the policies most embraced by big developers were the relatively uncontroversial changes to office-conversion rules and size bonuses for affordable projects in dense neighborhoods.
Asked who was funding the lawsuit, Graziano told reporters that the effort was “grassroots,” and pointed to an online GoFundMe page where the plaintiffs had raised about $21,000 as of Wednesday. Although several of the plaintiffs railed against the City of Yes policies during Wednesday’s press conference, their attorney, Jack Lester, insisted that the suit was based only on the procedure the city followed.
“In the lawsuit, we’re not challenging the policy,” he said.
